Beach Energy (BPT)

Citigroup has raised its target price on
Beach Energy
by 2¢ to $1.40 following the company’s strong September-quarter result.

However the broker has reiterated its “neutral" recommendation given the relative upside to the share price is only about 21 per cent.

While the company has several growth opportunities, Citi analysts say exploration success, proof of technology and proof of cost control would have to be seen before significant value from the projects can be included in the price target.

Oil production at the Cooper wells beat analysts’ expectations by 6 per cent, at 1.73 million barrels of oil equivalent, while revenue was about 3 per cent higher than expected at $121 million.

Net profit forecasts for the financial years to June 2012 and 2013 have been raised by $2 million, equalling 22 per cent and 5 per cent, respectively.

Production guidance for 7.5 mmboe for FY12 was reiterated, but oil production is currently limited because of trucking capacity constraints.